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The global AI rivalry is heating up, as countries and companies pour resources into research and development. But political considerations could affect the U.S. reaction to China, while Canada launches the first fund powered by artificial intelligence. Also, Portugal joins the countries pursuing robotics, and the United Nations considers a global drone registry.

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U.S.-China AI rivalry accelerates

It is no secret that the geopolitical race between the U.S. and China includes an AI rivalry. While the U.S. remains the leader by a wide margin, American companies must pay attention to advances in China. One of these companies is Google parent Alphabet, whose chairman, Eric Schmidt, recently warned that the U.S. risks falling behind as China catches up “extremely quickly.” Talent in some of the countries that are developing AI talent, such as Iran, are banned from entering the U.S.

Will the U.S. develop a centralized strategy to monitor and compete with China’s home-grown prowess? Perhaps Washington will overlook this AI rivalry in the hopes that Beijing will help it deal with other issues, like North Korea.

Such an approach seems plausible when considering that, just last week, the U.S. dropped charges against a dual citizen of Canada and China who was charged with stealing robotics trade secrets from a firm in Massachusetts. Lack of evidence or geopolitical maneuvering?

Creating a global drone registry

As drones move from labs and garages to playing a central role for consumers and cities, concerns are growing. Unmanned aerial vehicles have many applications (from precision agriculture to surveillance), are largely unregulated, and can create an array of security challenges for governments. One proposal, from the International Civil Aviation Organization (ICAO), which is part of the United Nations, is to create a global drone registry.

This could be a positive step, but the process of setting it up and maintaining it would be difficult. Certain countries could also see a global registry as an attempt by the West to control and track technology in “unfriendly countries.”

To make a global drone registry a reality, the U.N. should start by focusing on a handful of states, using them as pilots. Once it succeeds there, the U.N. can lobby the rest of the world to join in.

Portugal moves into robotics space

Practically every nation is looking to robotics and AI for economic initiatives. The latest entrant is Portugal. The Portuguese government has announced the creation of “free zones” with “special regulations” to allow certain robotics innovations to be tested. The goal is to attract foreign investment. Two of the technologies that the government wants to focus on and test are drones and self-driving vehicles.

Portugal is interesting because it is the only country in Western Europe, besides the Netherlands, that isn’t gripped by some extremist or secessionist controversy. This makes it a stable safe haven for companies looking to test robotics in Europe. It is also relatively close to North America.

Canada launches first AI ETF

Robotics and AI aren’t new in the financial world. But the idea that AI could control an entire investment strategy is now emerging around the world. In Canada, where Horizons ETF Management Inc., a financial services firm, has launched the country’s first exchange-traded fund (ETF) using AI.

Using AI in general to create investment strategies is an important milestone, and it marks the beginning of AI venturing into areas that may concern policy makers and central banks. Can AI be trusted? What happens if AI makes a mistake? How much of the stock market, and by extension the economy, is at risk?

In my book, I proposed that countries may begin using AI to guide their foreign investment strategies.

Japan’s robot influence continues to grow

For decades, the most powerful symbols of Japan’s influence were the logos of Honda, Sony, and Mitsubishi. Now, it could be the robot arms that originate in Japan and are in factories all over the world. Japan’s robot exports reportedly grew 39.9% in the third quarter of 2017 (compared with the same time in 2016). The main reason is the explosion of demand in China, with Japanese robot exports to China increasing by 80%.

This signals that robotics is becoming an increasingly important economic sector for Japan, but the country risks becoming dependent on China for its robotics exports. Should tensions rise between Tokyo and Beijing, China could deliberately cut imports of Japanese goods, including robots, to hurt Japan.

At the same time, FANUC and other major companies should consider their intellectual property as their robots enter mainland China and what steps they should take — with support from Tokyo — to protect themselves.

Abishur Prakash is a geopolitical futurist and author focused on how new technologies, such as AI, blockchain, gene editing, and virtual reality will transform geopolitics. He works at Center for Innovating the Future, a strategy innovation lab in Toronto. Prakash advises multinationals, governments, and startups. He is the author of three books: Next Geopolitics, Vols. 1 and 2, and Go.AI (Geopolitics of Artificial Intelligence). In addition to RBR, Prakash's work has been published in Forbes, Scientific American, and Newsweek.